Indian IT cos turn to gig workers to address talent shortage

Nearly two-thirds (65%) of the IT companies in India are employing gig workers this year, a higher share compared to 57% of the organisations in the year 2020, according to a new report which indicates that firms are turning to gig workers to address shortage of tech talent.

The report by industry body Nasscom, in collaboration with job portal Indeed and Aon, also said that while the share of tech organisations in India employing gig workers has increased, their proportion remains less than 5% of the total workforce. This is especially true for companies with more than 2,000 full-time employees. 

However, for smaller organisations with less than 2,000 full-time employees, gig worker proportion is more than 5%. Notably, none of the organisations have mentioned a decline in gig hiring. In about 15% of the surveyed organisations, the proportion of gig workers in the past two years has increased by more than 30%, proving the efficacy of the model, it said. 

Sashi Kumar, Head of Sales, Indeed India said that over 46% of organisations surveyed planning to increase the proportion of gig workers from current levels. “Businesses that place gig workers at the core of their business strategies will continue to thrive in the coming years.” 

The report showed, focus on specialised skills requirement, employee demand elasticity and cost optimisation are enabling organisations to embed gig for technology roles which traditionally were restricted to HR and support functions. “Software development, UI/UX design, and data analytics have emerged as the top three in-demand giggable skills within the technology sector,” it added. 

Notably, before the pandemic, gig workers were mostly hired for projects with duration of up to nine months. But the duration of projects being offered to gig workers has increased significantly, post-pandemic. Over 25% of the surveyed organisations are open to hiring gig workers for projects with a duration of more than 12 months, thus indicating the growing demand for talent and their effective use to meet short-term talent needs.

The Nasscom report, however, noted that while gig in the Indian Tech Industry looks promising, ensuring the quality of gig workers, hurdles in security checks and verification, lack of structured policies, and clarity on regulations or guidelines are some of the key concern areas amongst organisations.

In terms of compensation, a proven capability in the areas of expertise, qualifications and relevant years of experience are some of the top factors being considered by organisations while determining compensation for gig workers, said the Nasscom report.

Over 40% of the surveyed organisations decide on a fixed fee at the initiation of a gig contract. As many as 53% of the surveyed organisations have policies to absorb gig workers as full-time employees too, the report said, adding that currently, over 90% of the surveyed organisations remain open to re-hiring gig workers in the same or adjacent areas of work based on past performance evaluation. 

“The future workforce will indeed be a blended model wherein the gig economy is expected to play an important role not only as a talent management strategy but also accelerate job creation and boost the country’s economic growth,” said Debjani Ghosh, President, Nasscom. “As we navigate the new world order, multiple models will co-exist with trust and transparency at the core of it,” she said. 

The skills gap in the information technology sector is getting significantly worse, as the industry grapples with talent shortage and employee retention, according to a Skillsoft’s 2022 IT Skills and Salary Report published in October 2022. Less than two-thirds (63%) of IT leaders have been unable to fill three of more positions, according to the report as highly-skilled candidates in cloud computing, data science and cybersecurity have proved particularly hard to find, the study said.